Thinking of ditching renting and buying your own place? Think carefully! New research shows it now costs £300 more EVERY MONTH to buy a home with a 5% deposit than it does to rent – that’s an extra £3,600 a year!

This difference is mainly down to the sky-high mortgage rates we’ve all been seeing. Experts at Hamptons say those rates would need to plummet from 6.1% to around 4.2% just to make buying on par with renting.

Londoners Feel the Pinch Most

But hold on, it gets worse for Londoners. The average renter in the capital would have to cough up a gut-wrenching £775 extra each month if they decided to buy – a wallet-busting £9,300 a year!

South of Birmingham? Stick to Renting for Now!

In fact, Hamptons reckons buying with a 5% deposit just doesn’t add up financially for most areas south of Birmingham. So, unless you’ve got a hefty deposit or fancy relocating north, renting might be the smarter choice for now.

What’s Driving the Rental Surge?

So why is renting suddenly looking so appealing? Well, average rents across Great Britain hit £1,337 in May 2024 – a jump of 6.3% (or £79) compared to last year. This marks the third month in a row we’ve seen this level of increase. Ouch!

And if you’re already renting and thinking of renewing your contract, be prepared to dig deeper. Renewal rents shot up by 8.8% in May compared to the previous year.

London Rent Rises Slow Down

There is a glimmer of hope for Londoners though. The capital saw rental growth slow to 3.9% in May 2024 – the smallest increase since November 2021.

Small Flats, Big Rent Hikes!

Interestingly, smaller properties are seeing bigger rent rises than larger ones. This suggests more and more tenants are after cheaper places, putting pressure on prices at the lower end of the market.